It is common for newcomers to Bermuda to be shocked by the cost of just about everything here. This is true for businesses as well as consumers, but for this article I will focus on businesses as they are impacted the most by the cost of goods and I have the most experience working with business purchasers. The reality is that things are expensive in Bermuda, that is why Bermuda’s citizens and residents have the luxury of not paying income tax. Instead the Government of Bermuda funds itself by imposing an import duty on nearly everything that is imported to this country. Considering that Bermuda produces very little of what it consumes this tactic has proven very lucrative for the Bermuda government over the years.
Although the duty is mandatory, business purchasers still get “sticker-shock” (for lack of a better term) when they see the cost of goods in Bermuda, often forgetting that the cost of Bermuda import duties, wharfage, processing fees and shipping are all included in that sticker price. In reaction to what seems like an inflated price, company purchasers will shop online to get what they perceive as a better deal and import the goods to Bermuda themselves. However, those companies soon realize that they still have to pay the duty, shipping and all of the fees when the equipment they’re importing arrives in Bermuda. Additionally, by importing it themselves the company has to take on all of the risk and man hours associated with shipping and customs processing. What some companies don’t realize until it’s too late is that the equipment purchased overseas will often not have a valid warrantee or support contract as it was not purchased through a channel that is authorized for the Bermuda region (which usually falls under the Caribbean rather than the U.S.).
I’ve worked in Bermuda’s technology market for over seven years. In that time I have dealt with hundreds of companies with U.S. or Europe based purchasers that have been taken aback by the cost of equipment in Bermuda. However, after breaking down the pricing to show them the real cost I’ve always been within about 5% of the price to which they are comparing me. In fact my pricing is often less expensive then our overseas competitors. Even large organizations with global discounts from major manufacturer’s like Cisco and Avaya are able to realize their global discounts through local companies like mine. Additionally, by buying locally you’re dealing with companies that are experienced with the logistical challenges of importing to Bermuda. Local vendors will also cover the costs associated with shipping and customs processing. Moreover, you ensure you’ve purchased the equipment through authorized channels and that you will have a local company to honor the warrantee and help your company should it experience equipment failure. That is a lot of added value, all for roughly the same price that you can get the equipment for overseas.
Personally, I have come to a similar conclusion with consumer products. A few years back when I decided to buy a new TV, I shopped around Bermuda and compared the pricing to what I could get on-line. The company I eventually purchased the TV from was within 10% of what I could have brought the same model in for on my own. That was a premium I was happy to pay for the comfort of knowing I could return the TV without hassle if I had a problem.
I’m not suggesting that all vendors or retail outlets in Bermuda will give you great deals. As with any market there will be companies that provide good value at reasonable prices, and there will be companies that don’t. However, I am suggesting that you give local companies a chance to earn your business. I’m confident you’ll be pleasantly surprised.
Product Development Manager
CCS Group Limited